There is a growing acceptance of the benefits of the free trade agreement on both sides of Australian politics, according to the Australian Trade Commission’s regional director for the Americas.
There is a growing acceptance of the benefits of the free trade agreement on both sides of Australian politics, according to the Australian Trade Commission’s regional director for the Americas.
“The FTA has had a remarkably fast track over the past few years. It has attracted a lot of attention, positive and negative,” Ian Wing told an audience at the WA Business News Meet the Ambassadors breakfast last week.
“I have spent two days in Canberra appearing before parliamentary committees and people on the Opposition side, and I think now there is a general acceptance of the agreement which is unprecedented as something which is very much in Australia’s interests.”
Lauded as well as criticised by sectors of Australian business, the agreement came into effect at the start of the year, immediately eliminating 97 per cent of tariffs and increasing many quotas on items of trade between the two countries.
Parts of the agriculture industry have been particularly critical of the deal, believing the Federal Government caved in on many tariffs and quotas imposed by the US on Australian agriculture exports.
However, Mr Wing said the agreement had not only delivered immediate results for Australian exporters but the FTA was also a powerful enabling structure that will benefit Australia in the longer term.
“We can look at these sorts of agreements in terms of tariffs and quotas and things like that but I think they also deliver an enormous intangible benefit,” he said.
Mr Wing said that, in some cases, the AUSFTA could be more about goodwill than actual tangible results.
“The reality was, in the case of manufacturing, most of the US tariffs were very low anyway,” he said.
“Which compared to issues like currency appreciation doesn’t have a major impact.”
Mr Wing said the FTA had created what was being described as a “head-turning effect” and recognition of Australian capabilities.
“Whilst negotiating the agreement we touched a whole lot of people on some quite specific issues,” he said.
“The fact that people have observed that the US has signed the agreement … it is only the second agreement the US has made with a developed country.”
However, as well as the AUSFTA, Mr Wing also acknowledged the work of Australian businesses to increase awareness in the US.
“There are a lot of barriers to entry to the US, as there are to many other countries. Nevertheless, the kind of success that Australian companies are achieving in the US is indicative of a lot of very, very good things.”
He noted two specific WA companies gaining traction in the US.
Total Flower Exports, which exports $1 million of Western Australian cut flowers to the US each year, and smart card technology developer ERG, whose technology is recognised as a world leader in the US.
Despite the growing success Mr Wing sounded a warning that businesses should also be prepared for the US market.
“This is the world’s most competitive economy and that is not only a function of its size but it is part of the spirit behind it, which is part of the US economic experience,” Mr Wing told the breakfast gathering.
And while the FTA offered many tariff reductions, including some that were unexpected, Mr Wing recommended those looking to do business in the US sought advice.
For example, the tariff for men’s hair removal cream had been eliminated but not that for women’s hair removal cream, he said.
“The reason I point out this anomaly is that you do need to get expert advice,” Mr Wing said.
